In a recession, is college worth it? Fear of debt changes plans

Community colleges have long provided a way for adults to learn new job skills, often by attending part time. But these days, they're seeing a big increase in students such as Griffin, says Will Kopp, vice president for institutional advancement at Columbus State.

The median age of new students at Columbus State is 19, he says. By attending their first two years at a community college, Kopp says, "they're paying maybe a third of the tuition at state universities; maybe a tenth what they'd pay at a private school."

•Students who attend traditional four-year colleges are paying more attention to costs. More than two-thirds of students who applied for college this spring said the economic downturn affected their choice of colleges, according to a survey by the Princeton Review.

The survey also found "a great concern around financial aid," with 85% stating that they wouldn't be able to pay for college without it, says Robert Franek, vice president, publishing, for the Princeton Review.

Similarly, 70% of high schools reported an increase in the number of students who abandoned their "dream schools" in favor of more affordable options during the 2008-09 academic year, according to the National Association for College Admission Counseling.

More than 65% reported an increase in the number of students planning to apply to a state instead of a private school.

Nearly one-third of private colleges expect freshman enrollment to decline in the 2009-10 academic year, according to a survey by the National Association of Independent Colleges and Universities (NAICU).

Overall undergraduate enrollment in private colleges is expected to increase by 0.2%, the association said. In the past 10 years, enrollment at both public and private schools has increased by an average of 1% to 2% a year.

Private colleges are well aware of the financial difficulties facing many families and have increased student aid by an average of 9%, says Tony Pals, spokesman for the NAICU.

"Nearly nine out of 10 students at private colleges pay less than the list price," Pals says. "You also need to consider that students at private colleges are twice as likely to graduate in four years than their peers at public institutions."

A long-term investment?

Few would argue that college is a bad investment, but the economic downturn could diminish the value of that investment.

Those who graduate during a recession tend to start at smaller and lower-paying companies or firms, forcing them to change jobs more frequently than those who graduate during better times, according to a 2006 study by the National Bureau of Economic Research.

The study found that college students who graduate during a recession suffer an average 9% reduction in annual earnings initially, and that the discrepancies don't disappear until about 10 years after graduation.

Even before the recession, the value of a college investment was inflated, says Marc Scheer, author of No Sucker Left Behind: Avoiding the Great College Rip-Off.

Oft-quoted reports that college graduates earn $1 million more over their lifetimes than workers with high school diplomas help encourage students to take out unmanageable levels of debt, Scheer says.

"No debt amount seems steep compared to a $1 million payoff," he says.

'Less likely to struggle'

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